Guard employers may apply for assistance

National Guard, Feb 2002

NEWSBREAKS Small businesses that employ Guardsmen and Reservists called to active duty by President Bush in response to the Sept. 11 terrorist attacks may qualify for Military Reservist Economic Injury Disaster Loans.

These disaster loans are available from the U. S. Small Business Administration to small businesses during a period of military conflict.

The program will provide loan funds to eligible small businesses to cover operating expenses that would have been met, but cannot because an essential employee was called to active duty.

"The loss of a key employee, even for a short period of time, can financially devastate a small company or even cause it to fail. This low-interest loan program can provide the money necessary to support these small businesses until the reservist is able to return to the business," said Hector V. Barreto, head of the Small Business Administration.

Small businesses may apply for loans up to $1.5 million if they have suffered a severe financial impact due to the loss of a key employee. These working capital loans may be used to pay fixed debts, payroll, accounts payable, and other bills that cannot be paid.

The interest rate on these loans is 4 percent, with a maximum term of 30 years. The administration determines the amount of economic injury, the term of each loan and the payment amount, based on the financial circumstances of each borrower.

The filing period begins the date the essential employee is ordered to active duty and ends 90 days after the date the employee is discharged from active duty.